Central Government allowed Tesco to invest in brownfield entity

Jan 6, 2014 16:52 IST

Government of India allowed British retailer Tesco to invest in brownfield entities in India. Tesco could now invest up to 50 percent of the total Foreign Direct Investment (FDI).

image

Government of India has amended its current provision of FDI. Out of the total FDI, 50 per cent has to be mandatorily invested in back-end infrastructure such as warehouses, supply chain and logistics. This would be in addition to investments in front-end greenfield assets such as retail stores.

Previously, it was mentioned that the front-end retail stores must also be set up as an additionality and not through acquisition of existing stores.

According to the current policy, a foreign investor in the multi-brand retail sector can invest 51 per cent, the minimum investment size being 100 million dollar.

Tesco, the world's third-largest retailer, has a franchise agreement to provide support to Trent's Star Bazaar chain. Initially, Tesco would open stores at Karnataka and Maharashtra.

Investment in an existing asset or company is termed as brownfield investments.

Greenfield investment is a form of FDI where a parent company starts a new venture in a foreign country by constructing new operational facilities from the scratch. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees.

If you have any Question/Point on the above information, please ask/discuss it in the Current Affairs Group.

Is this article important for exams ? Yes28 People Agreed
Read more Current Affairs on: brownfield investment , greenfield investment , Tesco

Latest Videos

Register to get FREE updates

    All Fields Mandatory
  • (Ex:9123456789)
  • Please Select Your Interest
  • Please specify

  • ajax-loader
  • A verifcation code has been sent to
    your mobile number

    Please enter the verification code below

This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy. OK